Among those being mourned was a disabled war veteran and a four-year-old boy, as well as at least 12 members of Iran's elite Revolutionary Guard.

Gunmen dressed in military uniform opened fire on marching soldiers, bystanders and government officials, who had gathered to watch the parade on Saturday.

Almost half of those killed were from Ahvaz, while the others came from elsewhere in Khuzestan.

"Just look at the crowd," said Ahvaz resident Ghaseem Farhani. "With no fear, people are gathered here to see their soldiers and martyrs off to heaven."

Mourners reportedly shouted "death to America" and "death to Israel".

As relatives lay atop their loved ones' flag-draped coffins near Ahvaz's Sarallah Mosque, Iran's Intelligence Minister Mahmoud Alavia said many suspects were identified and "a majority of them were detained".

"We will punish the terrorists, one by one," he said.

General Hossein Salami, acting commander of the Revolutionary Guard vowed revenge on the perpetrators of the attack and what he called the "triangle" - or Saudi Arabia, Israel and the US - saying operatives would be harshly punished.

"You are responsible for these actions; you will face the repercussions. We warn all of those behind the story, we will take revenge," he said.

Iranian officials have blamed the attack, which took place at a military parade to mark the anniversary of the start of the Iran's 1980-1988 war with Saddam Hussein's Iraq, on an Arab separatist group and its alleged international backers.

The al-Ahvaziya armed group claimed responsibility for the attack. It accused Iran's Persian-dominated government of discriminating against the country's ethnic Arab minority.

President Hassan Rouhani vowed to deliver a "crushing response", while Iran's Supreme Leader Ayatollah Ali Khamenei linked the attack with the US and its "allies in the region".

The country's foreign minister, Mohammad Javad Zarif, said "regional terror sponsors" were responsible for the attack, adding he held "their US masters accountable".

General Hossein Salami, acting commander of the Revolutionary Guard, vowed revenge on the perpetrators and what he called the "triangle" - or Saudi Arabia, Israel and the US - saying operatives would be harshly punished.

"You are responsible for these actions; you will face the repercussions. We warn all of those behind the story, we will take revenge," he said.

Khuzestan province is home to the small minority of Ahvazi Arabs, who are divided over whether they want independence or devolution of power within a democratic, federal Iran.

The province has also been the site of recent protests over a nationwide drought and the economy.

Iran's foreign ministry has also summoned Western diplomats and an envoy from the UAE, accusing them of allegedly providing havens for the Arab separatists.

The Islamic State of Iraq and the Levant (also known as ISIS or ISIL) also claimed to be behind the shooting, providing images of the attackers, which did not resemble those published by Iranian media in the aftermath of the attack.